In re Jain Dairy Products Pvt. Ltd. (GST AAR Gujarat)
Question-1: Whether the benefit of exemption of GST at 0% is applicable for the invoices raised to the end use users in case of selling of paneer in loose form without sealing of packet / in loose carry bags and bearing details like name of manufacturer and branches or others as required by FSSAI or other relevant Acts?
Answer: The benefit of the exemption provided vide entry at Sr. No. 27 of the Notification No.02/2017-Central Tax (Rate) dated 28th June, 2017, as amended, can be extended to the applicant’s product subject to the fulfilment of two conditions viz. (i) ‘Paneer’ is not put up in unit container, means a package, whether large or small (for example, tin, can, box, jar, bottle, bag, or carton, drum, barrel, or canister) designed to hold a pre-determined quantity or number, which is indicated on such packages and (ii) Unit container is not bearing a registered brand name or a brand name on which an actionable claim or enforceable right in a court of law is available.
FULL TEXT OF ORDER OF AUTHORITY OF ADVANCE RULING, (Gujarat)
The applicant is doing business of manufacturing and selling of products of paneer, cheese and other milk products and also trading of other food items. They are registered under the GST Act, 2017.
2. At present, they are selling Paneer packed in unit container i.e. vacuum pouch (with Brand Name) and also in loose form/in plastic bags without sealing of packet/in loose carry bags and bearing details like name of manufacturer or branches or others as required by the Food Safety and Standards Act, 2006(FSSAI) or other relevant Acts, to consumers.
3. In view of above backdrops, the applicant raised Question, as below:
Whether the benefit of exemption of GST at 0% is applicable for the invoices raised to the end use users in case of selling of paneer in loose form without sealing of packet/in loose carry bags and bearing details like name of manufacturer and branches or others as required by FSSAI or other relevant Acts?
4. Statement containing the applicant’s interpretation of law and/or facts, as the case may be, in respect of aforesaid question(s):
4.1 The applicant submitted that vide Notification No.1/2017-CT (Rate)dated 28th June, 2017 following conditions were prescribed for taxability of goods like Chena or Paneer etc. @5% GST:
I. Put up in unit container and
II. Bearing a registered brand name.
4.2 However, Notification No.2/2017-Central Tax (Rate) dated 28.06.2017 through entry no. 27 has prescribed that Chena or Paneer, other than put up in unit container and bearing a registered brand name, is exempted from the levy of GST.
4.3 Further, the phrase “unit container” means a package , whether, large or small (for example tin, can, box, jar, bottle, bag, or carton, drum, barrel or canister) designed to hold a pre-determined quantity or number, which is indicated on such package.
4.4 From the reading of Notification No.1/2017-CT (Rate)dated 28th June, 2017, it appears that both the conditions as laid down by the above cited Notification (i.e. packing in unit container and a bearing a brand name) has to be cumulatively satisfied for the captioned food item for attracting incidence of GST.
4.5 In their case, since the company is selling the food items not packed in unit container as defined in GST provision and but containing the details like name of manufacturer or branches or other, as required by FSSAI or other relevant Acts, one of the condition precedent is not fulfilled and, hence there is no incidence of GST on sale of cited transactions.
4.6 Their interpretation of both the captioned Notifications are rational in nature and the intent of the Notification No.1/2017 –Central Tax is very clear. They are relying on interpreting in the essence in which it has been drafted. Further, they would like to draw the attention towards the fact that beneficial construction involves giving widest meaning possible to the statutes. When there are two or more possible ways of interpreting a section or a word, the meaning which gives relief and protects the benefits which are purported to be given by the legislation, should be chosen. A beneficial statute has to be construed in its correct prospective so as to fructify the legislative intent.
4.7 The liberal construction can only flow from the language of the Act and there cannot be placing of unnatural interpretation on the words contained in the enactment. Also, beneficial construction does not permit rising of any presumption that protection of widest amplitude must be deemed to have been conferred on those for whose benefit the legislation may have been enacted.
4.8 Also they are of the view that the provision of one of section cannot be used to defeat the provision contained in another. When it is impossible to completely reconcile the differences in contradictory provisions, the aspects have to be interpreted considering rationale of the provision and it must be interpreted in duh way so that effect is given to both the provisions as much.
5. At the time of personal hearing held through Video Conferencing on 18.06.2020, the Authorised Representative of the applicant, Shri Alap Shah reiterated the facts as stated in the Application.
DISCUSSION & FINDINGS:
.6 We have considered the submissions made by the applicant in their application for advance ruling as well as at the time of personal hearing. We also considered the question/issue on which advance rulings have been sought for by the applicant, relevant facts having bearing on the questions/ issues raised and the applicant’s understanding/interpretation of law in respect of the issue. We also considered the issue involved, on which advance ruling is sought by the applicant, relevant facts & the applicant’s interpretation of law. At the outset, we would like to state that the provisions of both the CGST Act and the GGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provisions under the GGST Act.
7. The applicant stated that they are engaged in manufacturing and selling of products of paneer, cheese and other milk products and trading of other food items also. They are registered under the GST Act, 2017.
8. At present, they are selling Paneer packed in unit container i.e. vacuum pouch (with Brand Name) and also in loose form in plastic bags without sealing of packet and bearing details like name of manufacturer or branches or others, as required by FSSAI or other relevant Acts, to consumers.
9. In this case, the moot point is to be decided regarding the taxability of paneer when sold in loose form in plastic carry bags and bearing the details like name of manufacturer and branches or others, as required by FSSAI or other relevant Acts.
10. Both the Notification No.1/2017-Central Tax (Rate) dated 28th June 2017 (which notified the CGST rates of intra-state supply of goods) and the Notification No. 2/2017-Central Tax (Rate), dated 28th June, 2017 (exempted intra-state supply of the specified goods) are relevant to decide the issue. Relevant portions of the notifications are reproduced herein below:
I. Notification No. 1/2017 – Central Tax (Rate) dated 28th June, 2017, as amended by Notification No. 27/2017- CT (R) dated 22nd September, 2017:
Schedule I
